RBS Bans Multi-Dealer Chat Rooms for Market Traders

The Royal Bank of Scotland is the latest financial group to ban multi-bank and multi-dealer chat rooms, after authorities investigated transcripts from a number of traders relating to inter-bank lending rate fixing.

RBS has followed UBS's lead to ban the electronic form of communication after global regulators have put online chat rooms for business purposes under close scrutiny.

Traders usually communicate in real time by using third-party run chat functions, such as Yahoo messenger and Bloomberg.

Deutsche Bank, Citigroup, Barclays, and JPMorgan are also tipped by sources to be banning multi-dealer online chat rooms.

RBS received a taxpayer funded £45bn (€54bn, $73bn) bailout in 2008 which eventually led it to be 81% owned by the government.

The European Commission fined RBS along with seven other banks a combined total of €1.71bn for operating in two cartels in the euro and Japanese yen interest rate derivatives markets.

RBS alone was slapped with €391m in fines for its bankers' roles in the cartels.

It follows a £390m fine settlement for Libor fixing from UK and US regulators in February.

In addition to the announcement, the US Commodity Futures Trading Commission (CFTC), Department of Justice and the UK's Financial Conduct Authority (FCA) unveiled transcripts of the Libor fixing misconduct that were committed between 2006 and 2010.

The excerpts reflected the awareness of RBS and UBS's conduct and collusion with an un-named interdealer broker.

Last year, Barclays also faced embarrassment when internal communications were published by the FCA as part of its damning evidence against the bank.

A Barclays trader emailed a Libor submitter: "If it's not too late low 1m and 3m [rate] would be nice, but please feel free to say 'no'...Coffees will be coming your way either way, just to say thank you for your help in the past few weeks". His friendly submitter responded: "Done...for you big boy."